Instructional goals
This course aims to provide the methodological and theoretical tools to understand how the economies work and to explain the past and current economic developments. We will focus on the stylized facts of business cycle fluctuations and economic growth, the determinants of unemployment and inflation. We will also discuss whether and to what extent policy can improve macroeconomic performance.
Prerequisites
Microeconomic Principles
Intended learning outcomes
Knowledge and understanding
This course aims to provide the methodological and theoretical tools to understand how the economies work and to explain the past and current economic developments. We will focus on the stylized facts of business cycle fluctuations and economic growth, the determinants of unemployment and inflation. We will also discuss whether and to what extent policy can improve macroeconomic performance.
Applying knowledge and understanding
The students will be able to
Apply a wide range of economic models to analyze contemporary and historical macroeconomic events, and propose appropriate macroeconomic policies
Making judgements
We expect students to be able to critically examine macroeconomic policies and use the appropriate economic models to critically demonstrate the scope and challenges of macroeconomic policies.
Communication
This course will give the students the possibility to acquire and understand major macroeconomic language and terminology in order to communicate their ideas, proposals, analysis and critical reasoning in the most effective and appropriate way with specialists and non-specialists.
Lifelong learning skills
This course will train the students to apply abstract thinking applied to complex economic system. This course will give students the tools to formulate and evaluate macroeconomic policy.
Course Contents
Introduction- Defining the macroeconomics variables. The Short Run, the Medium Run and the Long Run
PART I -The Short Run: The goods market, the financial markets and the IS-LM model. Fiscal and monetary policies in the short run. The open economy: The interest rate parity.
PART II – The Medium Run: The labour market and the natural rate of unemployment. The IS-LM-PC model. Fiscal and monetary policies in the medium run
PART III – The Long Run: Saving, capital accumulation and growth. The role of technological progress.
Reference Books
Blanchard, O. Giavazzi F & Ameghini A., Macroeconomics: A European Perspective 4/E, Pearson, 2021 supplemented by other reading selected by the lecturer and made available on the course e-learning platform.
Teaching Methods
Lectures and written exercises based on the problem set which will be made available few days before the class. The solutions of the problem set will be discussed in class.
Assessment Method
Written exam & problem sets handed in during the course.
The exam is based on the topics covered during the lectures and classes, the chapters of the textbook and on selected supplementary readings assigned during the course.
Thesis assignment criteria
Interview with the lecturer, interest in the subject
Does the syllabus cover sustainability topics?
Yes, it discusses the the sources of long run growth, including natural resources, and environmental issues in connection with the measurement of the gross domestic product
Week 1 Contenuto sessioni on line e on campus
A tour of the course. What is Macroeconomics? The short run, the medium run and the long run.
Key macro variables: GDP, unemployment and inflation. Definitions and facts.
The goods market. The composition of GDP. The demand for goods and the
equilibrium output.
Blanchard et al (2021), chap. 1, 2 & supplementary reading(s)
Week 2 Contenuto sessioni on line e on campus
The goods market: Government spending, taxation and the spending multiplier. Investment and saving. The IS curve.
Problem set 1
Blanchard et al. (2021), chap. 3 & supplementary reading(s)
Week 3 Contenuto sessioni on line e on campus
The financial markets: the money demand and the money supply. The role of commercial banks and the money multiplier. The LM curve.
Blanchard et al (2021), chap. 4 & supplementary reading(s)
Week 4 Contenuto sessioni on line e on campus
The goods market and money market together: The IS and LM model. The IS-LM model: fiscal and monetary policies. Financial crowding out. The zero lower bound.
Blanchard et al (2021), chap. 5 & supplementary reading(s)
Week 5 Contenuto sessioni on line e on campus
Nominal vs. real interest rates. Extending the IS-LM model
Problem set 2
Blanchard et al (2021), chap. 6 & supplementary reading(s)
Week 6 Contenuto sessioni on line e on campus
The open economy: The goods and financial markets in the open economy. The interest rate parity. The determination of output, interest rate and exchange rate in the open economy.
Blanchard et al (2021), chap. 18,19 & supplementary reading(s)
Week 7 Contenuto sessioni on line e on campus
The labour market: facts and theory. Wage setting and price setting curves. The medium run equilibrium.
Blanchard et al (2021), chap. 7 Employment Outlook (OECD)
Week 8 Contenuto sessioni on line e on campus
The Phillips curve & inflation
Blanchard et al (2021), chap. 8 & supplementary reading(s)
Problem set 3
Week 9 Contenuto sessioni on line e on campus
Mid-term break
The students will be asked to elaborate a mid-term exam. It is worth 30% of the total grade of students who attend the course regularly and take the final exam.
Week 10 Contenuto sessioni on line e on campus
Facts about long rung growth, Blanchard et al. (2021), ch. 11 and supplementary reading(s)
Week 11 Contenuto sessioni on line e on campus
The Solow Model Blanchard et al (2021), chap. 12& supplementary reading(s);
Week 12 Contenuto sessioni on line e on campus
Technological progress and economic growth.
Blanchard et al (2021), chap. 13 & supplementary reading(s)
Problem set 4.